An Examination of the Long Run Performance of UK Acquiring Firms
This study examines a comprehensive data set of large domestic takeovers by UK listed companies between 1984 and 1992. The contribution of this paper is to show, by using a series of models of abnormal returns, together with the Ibbotson (1975) 'Returns Across Time Series' model and a simple cross-sectional model of returns across all listed UK companies, that the average abnormal return for up to two years post-acquisition is unambiguously and significantly negative. In particular, acquirers financing a takeover through equity, and single (as opposed to regular) acquirers exhibit significant negative performance. There is also some evidence to suggest that diversifying acquirers perform worse than non-diversifying acquirers and that recommended bids are associated with poorer subsequent under-performance by acquirers than are hostile bids. Copyright Blackwell Publishers Ltd 1997.
Year of publication: |
1997-09
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Authors: | Gregory, Alan |
Published in: |
Journal of Business Finance & Accounting. - Wiley Blackwell, ISSN 0306-686X. - Vol. 24.1997-09, 7&8, p. 971-1002
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Publisher: |
Wiley Blackwell |
Saved in:
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